The Prime Minister blamed the resurgence of the global economy as Covid starts to retreat for rocketing demand. Speaking on his way to a three-day visit to the United States, Mr Johnson said the current problems were only “temporary”.
“They are caused by the resurgence of the global economy as Covid starts to retreat in parts of the world. Particularly in Asia there is a phenomenal demand for gas.
“And you’re seeing that demand affect supply around the world. That’s basically what’s going on.
“As the world economy starts firing on all cylinders – to use a hydrocarbon metaphor – things will start to smooth out.”
He added: “I have no doubt that supply issues will be readily addressed. We’re very confident in our supply chains.
“But in the meantime, we will make sure we work with all the gas companies to do whatever we can to keep people’s supplies coming, to make sure they don’t go out for business, and to make sure we get through the current difficult period.
“On the current supply-chain squeeze, it is fundamentally caused by the global economy coming to life again: the guy ropes are pinging off Gulliver and it’s standing up, and it’s going to take a while, as it were, for the circulation to adjust.”
Asked if that would be months, the Prime Minister added: “It could be faster than that, it could be much faster than that: but there are problems as you know with shipping, with containers, with staff – there are all sorts of problems. But then these are problems that affect the entire world.
“The gas supply issue is global, the HGV issue is in the United States as well as in Europe. So we’re seeing these same sorts of problems everywhere. But I think market forces will be very very swift in sorting it out, and we’re going to do whatever we can to help.”
Ministers have insisted gas supplies are not under threat and customers will be protected from big price hikes ahead of talks today to tackle the fuel crisis.
A record spike in wholesale gas and electricity costs has sparked fears of food shortages and chaos for customers as energy companies face collapse.
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Business Secretary Kwasi Kwarteng said regulator Ofgem yesterday had assured him there are “well-rehearsed plans in place to protect the market and consumers”.
Mr Kwarteng is meeting around 20 energy companies for talks today.
He said: “I understand this will be a worrying time for businesses and consumers. We are working hard to manage the impact of global gas price rises.
“Unfortunately, small energy suppliers are facing pressures due to sudden increases in global gas prices. Four small suppliers have ceased to trade in recent weeks.
“If a supplier fails, Ofgem will ensure customers’ gas and electricity supply will continue uninterrupted. Our priority is to protect consumers.”
Mr Kwarteng said a special administrator will be appointed to make sure customers continue to receive energy until they can be moved to a new supplier.
He said the energy price cap will protect millions of customers from the sudden increase in costs.
“Energy security will always be our absolute priority,” the Cabinet minister added.
“The UK benefits from having a diverse range of gas supply sources – both domestic, and from reliable import partners such as Norway.
“I am confident security of supply can be maintained under a wide range of scenarios.”
The energy crisis is also having a knock on effect on food supplies, triggering warnings that Christmas dinners could be “cancelled”.
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Steep rises in gas costs led two large fertiliser plants in Teesside and Cheshire, which produce carbon dioxide gas (CO2) as a by-product, to shut down.
CO2 is used in the humane slaughter of livestock, extends the shelf-life of products and is vital to refrigeration cooling systems.
Food suppliers have warned it will lead to shortages within weeks and could also hit stock levels over the festive period.
Mr Kwarteng held face to face talks yesterday with Tony Will, the global chief executive officer of CF Industries, the UK’s largest domestic supplier of CO2.
He said: “We discussed the pressures the business is facing and explored possible ways forward to secure vital supplies, including to our food and energy industries.”
Experts have called environmental levies imposed on bills to be cut to save customers around £150 a year.
Increasing the frequency of reviews on the energy price cap, which holds down prices, would help suppliers but leave households worse off.
The government is also said to be considering setting up a “bad bank” to take on unprofitable customers from energy firms that go bust or underwriting the losses.
It is feared more small energy suppliers will collapse in the coming days, leaving a million customers needing to find a new supplier.
Cabinet minister Alok Sharma insisted the government will protect customers from the surge in costs.
He said: “The clear message that is coming out of this is that there is no immediate concern in terms of supply, we don’t see any risks going into the winter.
“People should be confident that the supplies will be there and that we will be protecting them in terms of price rises. But of course we are not complacent about this.”
Mr Sharma, who is President of Cop26, the climate change summit the government is holding in Glasgow in November, said “very detailed discussions” were taking place to stop problems in supply and “people shouldn’t be concerned”.
“We are not being complacent at all”, he added.
Wholesale prices for gas are up 250 percent since January, including a 70 percent increase since August.
The huge jump has been blamed on a combination of high demand, planned maintenance at some gas sites and lower solar and wind output.
Greg Jackson, chief executive of Octopus Energy said this was “the most extreme energy market in decades”.
He added: “Behind this are millions of customers and thousands of people whose jobs are going to be affected.”
Mr Jackson said the energy price cap means that standard variable tariffs are “actually way below the cost of supplying energy today”.
Ian Wright, from the Food and Drink Federation industry body, has warned of shortages in some products within a fortnight but insisted “we will not run out of food”.
Shadow Treasury minister Pat McFadden said: “This really must act as a spur to avoid situations like this where suddenly we’re very exposed when there’s an international price spike.”
“In the short term what the Business Secretary must do is ensure continuity of supply, that’s a basic duty of Government for both domestic consumers and for businesses.
“We’ve seen other ramifications of this over the last 24/48 hours, for example on food supplies, with CO2 being a necessary by-product, and in the long-term what this has shown is the need to get on with the transition to net-zero and the vulnerability of the reliance on fossil fuel markets, especially international ones.”Internet Explorer Channel Network